Q4 2016 Austin Research & Market Forecast
Austin’s office market seems to be leveling out
Boots On The Ground Commentary by David Bremer
Our “Boots on the Ground” view point is the voice of our experts, who have broken down the market data and compared it to what they are seeing for themselves. This is their take on what the numbers actually mean for the Austin office market.
While Austin is still very much a Landlord’s market, it’s not the same feeding frenzy it was 6-12 months ago. Base rental rates stayed largely flat, while building operating expenses continued to increase (primarily due to increasing property taxes). Our team has seen a number of large office building transactions over the last few years at historically high prices per square foot. As long as this activity continues, Austin will continue to see higher property tax valuations.
Our local experts have also seen a great number of new subleases flooding the market in the past few months, with a majority of these opportunities being on or near the 360 corridor. These include some of the traditional “we don’t need the space” or “we outgrew our space” scenarios, but we’re also seeing a flight to areas that have less traffic or more walkability.
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